Bob Willott on the bottom line

BOB WILLOTT

AIM listed market research group Optimisa has written off a substantial part of what it paid to acquire EQ Group and nxt:MOVE Corporation and is working to satisfy bank lending covenants by the end of this month.  The write-offs contributed to a loss of £4.5 million in Optimisa's delayed accounts for 2008, published today. The accounts had been expected to be published by the end of May (see Optimisa accounts delayed further). 

As already announced, the group is also seeking approval to be delisted from AIM at its forthcoming annual meeting.

Optimisa has written off £4.3 million of the £7.7 million cost of acquiring the financially stretched EQ Group in 2007 (that cost included fees and a £0.9 million overdraft taken over on top of the purchase price of £6.4 million).  It has also written off all the goodwill arising from the acquisition of nxt:MOVE in the United States, accounting for a further £0.8 million. 

Talks are now proceeding with the aim of selling nxt:MOVE before 30 June in order to comply with banking covenants.  The group's embryonic Asian business has already been sold to its management for a nominal sum.  These disposals are intended to stop the current cash drain which was exacerbated by a particularly sharp fall in revenues from those territories in the first quarter of this year.

Auditors PricewaterhouseCoopers highlighted the vulnerability of the group in their report, pointing out that there is increased risk of over predicting profitability in the current economic climate.  "The matters set out in note 1.1 to the financial statements indicate the existence of material uncertainties which may cast significant doubt over the ability of the group to continue as a going concern", the audit report explained.  Optimisa's directors say they have "reasonable expectation that the group can operate within its existing financial arrangements" and therefore considered it appropriate to have used the going concern basis for preparing the accounts.

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